Apple’s canned car put it in the unusual position of far behind the pack

Apple’s big car project may have been ambitious, but it was never official, so it’s only fitting that its demise has only been announced internally. As Bloomberg first reported, project leader Kevin Lynch and COO Jeff Williams yesterday broke the news to nearly 2,000 staffers working on the decade-old scheme. Some will lose their jobs; many will be shifted to Apple’s generative AI projects.

I’m sure most of the people who were working on the project won’t feel the same way, but the reaction from outside Apple has been largely positive.

Constellation Research founder Ray Wang told the BBC it was a “smart and long-awaited decision” as “the market demand for EVs is not there, and AI is where all the action is.” From the Apple investor side, Synovus Trust senior portfolio manager Dan Morgan professed a “sigh of relief” in comments to the Wall Street Journal, arguing: “When you looked at Apple’s future initiatives, the car project was always the most far-fetched for Apple. This just isn’t in their wheelhouse.”

Swissquote Bank senior analyst Ipek Ozkardeskaya compared the move to Meta’s decision to pivot from the metaverse to AI. “Having understood that missing the AI turn would be a severe hit to the company, they are getting—a bit later than the others—into the AI race. Better late than never.”

Tim Cook may disagree about the “late” part—he’s consistently pointed out that Apple has embraced AI in a behind-the-scenes sort of way. But no matter how plausible his protestations have been, investors haven’t been listening. In an age of AI FOMO mania, the markets demand a spotlight on any company’s embrace of the technology and are currently (and hopefully only temporarily) unenthused about EVs. It also didn’t help Apple’s EV push that electric car prices are being driven down to cutthroat levels. Chinese carmaker BYD, for example, is selling an EV in its home country that starts at just over $11,000. So here we are.

The modest share-price bump that followed the news of the car cancellation may reflect the fact that Apple found itself in the unusual position of being perceived as late to the party, no matter what it chose to do.

Bloomberg Apple-whisperer Mark Gurman reported last month that the release of the company’s car had been pushed back to 2028 at the earliest and, worse, it would no longer be a fully autonomous vehicle. If Apple is going to enter a new market segment, it needs to do so with market-leading technology and ideas, like it’s done with the Vision Pro. Had it plowed on, it seems likely that Apple’s car wouldn’t have been a first on any significant front—it wouldn’t even have been the first car from a phone maker, seeing as Xiaomi just showed off its own EV at Mobile World Congress this week.

So now Apple is left giving the impression that it’s scrambling to keep up with its peers in generative AI. It’s not the company’s usual look, but at least Apple can really make something of gen AI in its proven, existing product lines. There’s little use eyeing an entry into a cutthroat new sector when staying ahead in your actual wheelhouse requires a ton of focus.

I’ll give the last word to Deepwater Asset Management’s Gene Munster, who wishes Apple was moving forward with both gen AI and its EV: “An Apple Car would have been epic.” More news below.

David Meyer

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This story was originally featured on Fortune.com